Money Secrets Of The Wealthy
Secret 1. The Wealthy Buy Assets
Whole life insurance is an asset offering living benefits and a death benefit
Wealth coach, educator and entrepreneur, Robert Kiyosaki, puts it best when he says that the wealthy buy assets while the poor and middle class buy liabilities.
Kiyosakis point isnt hard to understand if you look at the fact that most peoples most valuable financial investment is the family home. He makes the point that, because your home doesnt create any cash flow and yet costs you money in terms of expenses, therefore your home is not an asset.
Kiyosaki simplistically defines assets as anything that puts money into your pocket and liabilities as anything that takes money out of your pocket.
You may believe that your home is an asset because it offers a tax deduction for mortgage interest AND may appreciate in value.
However, consider that your home takes money out of your pocket, it is subject to foreclosure if you dont pay your mortgage or property taxes, many states homestead exemption laws dont protect your home from creditors, and your equity is essentially dead money earning zero a rate of return that is trapped in your home and not liquid and easily accessible.
Butif you consider what could be accomplished by converting your home into an investment property, leading to financial benefits such as writing off depreciation and expenses and gaining cash flow passive income, you may start seeing what an asset looks like.
The Wealthy Avoid Taxes
How To Use Life Insurance As An Investment Not Just A Last Resort
There is, without a doubt, no type of insurance we like to think about less than life insurance. Its a financial product that, by its nature, is geared toward answering questions of when and how youll die, possibly even prematurelyand, subsequently, how the nearest loved ones in your life will fare after you’re gone.
Life insurance can be a vital tool, helping mourning family members deal with the monetary impact when someone passes away. The payout from life insurance can mean the difference between your survivors struggling to get by and having a decent financial cushion.
But life insurance doesnt always have to be thought of as simply an unmentionable rescue package should the worst happen. It is, like any other type of insurance policy, a complex investment with its own pros and cons. And depending on how you select and manage it, life insurance can become a smart weapon in your overall financial arsenal.
As with any part of your financial life, early attention to your insurance needs is rewarded. Its common for people to approach life insurance with an Ill handle that later attitude, says Marcy Keckler, vice president of financial advice strategy at Ameriprise Financial. a somber topic, and many people assume they will have time to sort out the details of coverage later down the road,” she says. ” you might be putting your loved ones at risk of having to cover financial obligations out of pocket if you continue to put it on the back burner.
New York Life Whole Life Insurance
New York Life offers three different whole life insurance policies: standard, custom and value. Each of these policies offers protection for your lifetime, builds cash value at a guaranteed rate, qualifies you to receive dividends and has level premiums. The primary differences between these policies have to do with their payment schedules and the rate at which your cash value accumulates.
A custom whole life policy allows you to adjust the period of time over which you pay premiums, so it may be the better choice if you want to pay higher rates for several years to lock in lifetime coverage. The value whole life policy offers a lower guaranteed rate of return for your cash value in exchange for lower premiums, which may be preferred by seniors or those who want discounted permanent life insurance.
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Best For Permanent Life Insurance Policies
While term life insurance can be appealing due to its low cost, the hallmark of term coverage is that it’s temporary. If youre more risk-averse and want lifelong protection, permanent life insurance may be a better choice.
New York Life is our choice for the best provider of permanent life insurance. It offers many permanent-life options whole, universal and variable universal life policies, along with ample insurance riders to customize your coverage. The company also earns praise in customer reviews and high scores for financial stability, handling complaints and customer service from agencies that gather that data.
Cost Of New York Life Insurance
Although other life insurance companies have detailed online quote tools, New York Life doesnt have a rate tool or pricing information on its site. The only way to find out about premiums and cost is to work with a New York Life agent.
How much your policy will cost is dependent on a range of factors, including your age, location, gender, medical history and the coverage amount you desire. Its a good idea to compare insurance quotes from multiple companies before making a decision. If youre not sure where to start, check out our selections for the best life insurance companies.
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New York Life Term Insurance Riders
New York Life offers several riders for its term life insurance policies, although the selection varies depending on your location and policy.
- Accidental death benefit: Additional coverage if you die in an accident.
- Children’s insurance: Parents can purchase coverage on their children.
- Disability waiver of premium: Premiums are waived if you receive a qualifying disability.
- Extension of conversion period option: A longer time during which you can choose to convert your coverage to permanent life insurance.
- Level premium convertible term 5 rider: Additional term insurance coverage with level premiums for a five-year period, after which rates increase annually.
- Living benefits rider: A terminal illness rider that lets you receive a portion of the death benefit while still alive if you’re diagnosed with a terminal illness .
- Policy purchase option: Ability to purchase additional coverage at certain times without additional underwriting.
- Spouse’s paid-up insurance purchase option: If you die during the policy term, your beneficiary can buy a new paid-up policy without demonstrating insurability.
- Upromise
- Yearly convertible term rider: Additional term insurance coverage with level premiums for a one-year period, after which rates increase annually.
Anything Else Consumers Should Keep In Mind
Damon Gonzalez: If you are going to purchase a whole life policy, there is a plethora of riders and acronyms involved, and you should hire an honest advisor who has experience designing policies to maximize cash value. The advisor will need to access different insurers illustration software to design the best policy for you based on your health, age and how much you want to save. You can receive drastically different illustrations from agents that represent the same company, so dont be afraid to shop around.
Optimizing a policy for a client often means blending in term insurance into the whole life policy. This pays the agent less commissions and puts more money in your policy. Unfortunately some agents aren’t willing to present these policy designs.
Steven Elwell: Consumers should keep in mind that many people calling themselves financial advisors have a financial incentive to sell whole life insurance as a retirement strategy when other avenues have yet to be utilized. I would caution investors that buyer beware should apply when an advisor appears to be pushing a product without reviewing other, less-costly options.
Brian McCann: If you dont need permanent insurance, term insurance is a very affordable option. You can invest the money you save on premiums to build a retirement nest egg. If you havent maximized your tax-favored accounts, such as an IRA or 401, then you can also get tax benefits on your contributions.
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When Your Assets Will Be Subject To An Estate Tax
People with particularly high net worths can benefit from permanent life insurance. If your heirs will have to pay an estate tax on your assets when you die, a permanent life insurance policy can help offset some of those costs.
In 2022, any assets above $12.06 million are subject to an estate tax. However, the death benefit of a life insurance policy is tax-free, as long as it pays out to a beneficiary, rather than your estate. So, for example, if your estate is worth $13 million and $940,000 of that is subject to an estate tax, you might take out a permanent life insurance policy worth $1 million so that money goes directly to your heirs â tax-free â when you die.
A permanent life insurance policy might also benefit your heirs if your estate consists largely of fixed or long-term assets, such as real estate. Your heirs will need to pay federal taxes on your estate within nine months of your death, which could be difficult if your assets arenât liquid. A life insurance policy with a death benefit large enough to cover the taxes your family will owe can ease that financial burden.
New York Life Insurance Company
| 1845 176 years ago |
| Headquarters |
|---|
| Ted Mathas, Chairman and CEO |
| Products |
| .com |
New York Life Insurance Company is the third-largest life insurance company in the United States, the largest mutual life insurance company in the United States and is ranked #67 on the 2021 Fortune 500 list of the largest United States corporations by total revenue. NYLIC has about $593 billion in total assets under management, and more than $25 billion in surplus and AVR. In 2007, NYLIC achieved the best possible ratings by the four independent rating companies . Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.
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Types Of Coverage Offered
New York Life Insurance Company offers term, whole, and universal life insurance policies.
Term
With term life insurance through New York Life, you can get the immediate coverage you need right now with the option to move into a different and more long-term policy as your needs change later in life.
With New York Lifes option to convert your term life policy to a more permanent one later, their products fit your budget as your needs change at each chapter of your life.
A lot of families purchase term life policies when they purchase a home and are worried about paying off the mortgage or they have children in college and want to make sure their education costs are covered in case something were to happen to them as the main income earner.
Term life lets you choose exactly how long you want your coverage to last, and with term life, there is only a death benefit associated with it. There is only a payout of the death benefit if you pass away during the term of your policy. Also, once the policy ends, your coverage ends.
However, you are typically given the option to convert your policy to a permanent life insurance policy once your term life insurance ends.
There are four types of term life insurance policies offered by New Life Insurance:
Whole
New York Life offers whole life policy insurance that stays in effect for an individuals lifetime and will pay out a death benefit to a designated beneficiary upon that individuals death.
Universal
Variable Universal
Riders
Life Insurance Buying Guide
Before you start comparing companies, choose the type of life insurance you want, such as term or whole life. Decide which life insurance riders, if any, you want the policy to include. Calculate how much life insurance you need and how long you want the coverage to last. Check that the insurers youre considering offer the coverage youre looking for.
When comparing rates, be sure the quotes are for the same amount of coverage over the same period of time. Its also important to make sure the policys medical requirements match your needs. For example, if you want to skip the life insurance medical exam but dont mind answering health questions, confirm that the application process for each policy you’re comparing aligns with that.
Price may not be the biggest driver behind your decision to buy. Look at the number of consumer complaints each company receives, as high numbers can be a red flag about the quality of service.
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New York Life Insurance Coverage Types
Founded in 1845 and headquartered in New York City, New York Life offers a variety of life insurance policies, which provide a greater likelihood of finding a policy that fits both your insurance needs and your budget. New York Life offers four different life insurance policy options: whole, term, universal and variable universal. When it comes time to choose the right policy, working with a licensed insurance agent can help ensure you make the right selections and fully understand the differences between the various policy options in the context of your financial situation.
Review Of New York Life Whole Life Insurance
When seeking out the best life insurance it is imperative that you familiarize yourself with the different carriers in the marketplace before you make a decision for any one company.
The good news is that we have compiled life insurance reviews of the highest rated companies in the U.S.
About New York Life
New York Life was founded in 1845, making the company over 172 years old.
New York Life is a mutual company. In fact, New York Life is the largest fortune 500 mutual insurance company.
What is a mutual insurance company?
Mutual insurance companies are not owned by shareholders but rather by the participating policyholders, who share in the ownership rights of the company, as well as take part in the companys profits through dividends.* Mutual companies are privately held and operate for the sole benefit of policyholders, rather than for the benefit of stockholders.
New York Life was the first company to pay a cash dividend to policyholders.
For 2016, New York Lifes dividend interest rate was 6.2% and the company will pay participating policy holders a total of $1.77 billion in dividends in 2017, a 5% increase from 2016.
*dividends are paid to participating policy owners.
New York Life Ratings
NY Lifes ratings as of August 2018:
- A.M. Best rating: A++
- Fitch rating: AAA
- Moodys Investor Service rating: Aaa
- Standard and Poors rating: AA+
- Comdex Ranking 100
New York Life Products
LTC Select Premier
- Reimbursement long term care policy
Mutual Funds
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Is New York Life A Scam
New York Life is one of the most respected insurance providers in the country and the largest mutual life insurance provider anywhere. Its renowned not only for its policies but its employee training services. Its not a scam or pyramid scheme.
In 2019, New York Life featured as #71 on Forbes Fortune 500 List and the Americas Best Large Employers list. They remained the largest mutual life insurance company in the United States during that year.
New York Life Investment Management Investment Philosophy
The investment approaches that NYLIM use differs from program to program. However, they all seek to drive returns in a risk-adjusted manner according to the client’s risk tolerance.
The MAS team takes a top-down investment approach to determining asset allocations for client portfolios. By conducting careful analyses of economic and market data along with macro trends, the program looks to provide valuable insights into how various companies and securities will fare as a part of client portfolios. The MAS team also focuses on multi-asset advisory services. It also has a long-term view.
The SMA Group is governed by a similar investment philosophy. SMA strategies include convertible securities, municipal bonds, large-cap and all-cap equity, global choice equity, global equity yield, emerging markets equity, international equity, hedged market and more.
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Can I Take The Cash Value Of My Life Insurance
You can withdraw money or take a loan against your cash value and use the money for anything you like. If you decide to terminate the policy, you can take the cash value .
Keep in mind, if you withdraw money from the cash value and the amount you withdraw includes interest or investment gains , you will be taxed on that portion of the withdrawal.
What Are The Main Disadvantages Of Whole Life As A Retirement Savings Strategy
Steven Elwell: Whole life insurance can come with high premiums and high investment costs when dealing with variable universal life insurance. Many times, an investor can find substantially less expensive investment options outside of life insurance. The longer the investment time frame, the more important these investment costs become.
Damon Gonzalez: The insurance company is expecting the premium you commit to each year, and they arent very flexible. Your policy could lapse if you lose your job and cant make premium payments anymore. It is important to keep in mind that you are paying for life insurance, and the cost of insurance will be a drag on your overall performance.
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